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What is the price of a stock estimated to pay a dividend of Rs.60 next year, if the dividend growth rate is 5% and the appropriate discount rate is 8%?

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Question:

What is the price of a stock estimated to pay a dividend of Rs.60 next year, if the dividend growth rate is 5% and the appropriate discount rate is 8%?

A.

Rs.18

B.

Rs.19

C.

Rs.20

D.

Rs.21

Answer» c. Rs.20

Note: The above multiple-choice question is for all general and Competitive Exams in India.